University of California, Riverside

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Are ARMs Bad for Business?


The New Reality of Adjustable Rate Mortgages

Managing the risks on rising interest rates.

(May 16, 2006)

RIVERSIDE, Calif. — (www.ucr.edu) — As mortgage rates climb to their highest levels in four years and the number of hybrid adjustable rate mortgages (ARMs) rise to record levels, the average home owner will soon be faced with a problem formerly reserved for corporate CEO’s — interest rate risk management.

As interest rates and mortgage payments rise with ARMs what are the options? Should they be refinanced and abandoned for a fixed rate mortgage?

Vassilis Polimenis, associate professor of finance at UC Riverside, will explain the basics of interest risk management and why it’s no longer the exclusive province of Wall Street bigwigs at the next A. Gary Anderson Graduate School of Management Business Speaker Series presentation on Thursday, May 25, 2006 at 7:30 a.m. at the California Museum of Photography, 3824 Main St., Riverside. He will also discuss the concept of duration and convexity and the tools available for managing interest rate exposure.

Polimenis, a recognized expert in this field, teaches securities valuation, corporate finance and risk management at A. Gary Anderson’s MBA program. He received his doctorate in finance from the Wharton School of the University of Pennsylvania, and graduate degrees in finance, computer science and engineering from the University of Pennsylvania and UC Berkeley. He has been teaching at UCR since 2001.

Started in January of this year, the Business Speaker Series features informal presentations by academics and business leaders to meet the needs of the Inland Empire business community. Future presentations will be held on the last Thursday of the month through the end of 2006. Admission is free.

For more information contact Lisa Ludwig at (951) 827-2519 or lisa.ludwig@ucr.edu

ADDITIONAL CONTACTS

The University of California, Riverside (www.ucr.edu) is a doctoral research university, a living laboratory for groundbreaking exploration of issues critical to Inland Southern California, the state and communities around the world. Reflecting California's diverse culture, UCR's enrollment has exceeded 21,000 students. The campus opened a medical school in 2013 and has reached the heart of the Coachella Valley by way of the UCR Palm Desert Center. The campus has an annual statewide economic impact of more than $1 billion.

A broadcast studio with fiber cable to the AT&T Hollywood hub is available for live or taped interviews. UCR also has ISDN for radio interviews. To learn more, call (951) UCR-NEWS.

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